The stock market could see a correction at any time,
according to Leon Cooperman, chairman of hedge fund Omega
We could have a five to eight percent correction at
any time, Cooperman said during remarks made Tuesday
morning at the CNBC Institutional Investor Delivering Alpha
Conference at the Pierre Hotel in New York. He added that a
correction could be a result of anything from a disappointing
earnings report to threats of a nuclear attack from North
Cooperman, who considers himself a value investor, shared
his top stock picks for capturing alpha. They include two
energy companies: Hess Corp. and WPX Energy Inc.
Energy seems overly discounted in the market,
Cooperman said. My two picks have a growing production
His bets rely on the theory that oil prices will increase in
the coming months. Cooperman said that if oil prices remain
around $40 to $45 per barrel, hell not only be wrong
about the two stocks, but also wrong about the economy. His
view is that if the economy grows, more oil and gas will be
used to transport goods and services, pushing prices
My game is to try to get more for less,
Cooperman said. I want stocks with more underlying asset
value, more earnings growth or more yield. There has to be some
combination of statistics that jumps out.
Following Coopermans comments, WPX shares were up 2.1
percent at $10.04 around mid-morning Tuesday, while Hess shares
rose 1.3 percent to $41.60 each.
Cooperman added that he likes First Data Corp., an
electronic payment provider that was one of KKRs largest
investments in 2007. Cooperman said the KKR-backed
companys 12 percent earnings growth and its low share
price makes it an attractive investment.
Cooperman also said pharmaceutical company Shire looks
interesting as an investment, despite investor concerns that
the market for hemophilia drugs is too crowded. These concerns
have driven down Shires share price, and that, coupled
with its 12 percent growth, is what Cooperman said he finds
intriguing about the company.
He also noted that United Continental Holdings is an
attractive investment. The airline company has a 15 percent
growth rate and is a significant buyer of its shares. As a
result, Cooperman said he thinks the stock can reach $100 in
the next 12 months. United was trading at $60.55 mid-morning on
Cooperman also remarked on risk-taking in the fixed-income
Bonds to me look like a bubble, he said.
Everyone is moving out the risk curve.